Worry about cost but remember the long-term view

Jan Simonsen, ROCKWOOL Group

The immediate finances that come with any renovation can be misleading. See how they help in the long run.

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Energy renovation investments

All of us can relate to the struggle of having to pay bills. Whether it’s the mortgage, rent, electricity, cable or the Internet, there always seems to be a utility that needs your attention somewhere in your life. With this in mind, it becomes easy to see why people are worried about investing money into something with an uncertain return on investment.

For most people, anytime the word “renovation” is brought up, it gets tossed around as a project involving repainting or changing the design of the kitchen. These individuals, for the most part, are not eager to sink more costs into something that they believe they can live without.

However, what they must learn is that deep energy renovations are different than these run-of-the-mill home projects. In fact, this type of renovation provides a different end-game result that means an overall better quality of life for the homeowners and their communities.

A study from the Global Building Performance Network revealed that energy renovation investments reflect a return to the society of $2 for every $1 invested. When comparing these numbers to individual households and businesses, you can see how much these investments can really pay off.

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Note: Investments and energy cost savings are cumulative from today to 2050 (discounted). The result is based on a scenario in which the annual rate of renovations of the building stock increases from 1.4% to 3% by 2020 and remains constant hereafter. It is assumed that renovations will result in at least 70% improvement of the energy performance of a building, and that technology learning decreases investment over time.

Positive gains

Despite this evidence, you might still be asking: What goes into one of these renovations?

To answer that, consider that an energy upgrade takes place as part of a general renovation cycle. This involves the upgrade of a building’s envelope - with the aim of delivering energy reduction at its finest. Furthermore, this reduction saves on energy bills. You get a break on paying monthly bills, while also lowering your contribution to air pollution.

What this all boils down to - is whether or not people are willing to invest money to save in the long-term. For those who are still sceptical, they should consider that this practice has a history of proven success.

A separate case study conducted in the United Kingdom (UK) illustrated that in one instance, a residential apartment complex had energy bills reduced by 90% and had a positive net present value after 19 years.

Renovations such as these are meant to positively impact the lifestyle of the people who pay for them and the ones closest to them in their neighbourhoods. Without any knowledge of these enhancements, the negative effects of energy consumption and emissions will continue the barrage of pollution on the world.

For those that care about their well-being, the undertaking of this type of renovations can offer positive gains for present buildings and future homes.

Energy renovation of Wilmcote House, United Kingdom

Wilmcote House is a large residential apartment complex in Somerstown, Portsmouth in the United Kingdom. Before its renovation, many residents were unable to heat their apartments. The buildings were deteriorating, and maintenance costs were rising. The owners were left with the choice of either demolishing and rebuilding or conducting a deep renovation. They chose to renovate as it proved to be more cost-effective. In fact, the investment is expected to have a positive net present value after 19 years. After 30 years, the investment is expected to have a new present value of £413,203.

The objectives of the renovation project were to reduce energy bills for the residents, improve thermal comfort, enhance the building’s aesthetics, reduce maintenance costs and positively impact the community’s perception of the building. The renovation delivered on all of the objectives. Energy bills were reduced by up to 90% and residents reported improved thermal comfort and improved overall living conditions. Moreover, the renovation had a positive impact on the resident’s engagement with the community as they felt involved in the process.